Independent Adjusters Should Write Two Reports To Ensure Privilege

Independent adjusters attending a claims scene should be writing up two reports instead of one larger report, thus increasing the chances of covering the report under litigation privilege, according to Richard Lindsay, partner with Lindsay Kenney LLP.

The “dominant purpose” test is used to determine whether a documentation falls under litigation privilege, Lindsay told delegates at a Risk Management Counsel of Canada seminar in Toronto.

If the dominant purpose of the preparation of the document was for the anticipation of litigation then it will fall under litigation privilege. If, however, the document has multiple purposes, problems can arise as to whether it falls under privilege.

Independent adjuster reports tend to be the biggest problem, Lindsay notes. In a loss, an adjuster will attend the scene with a multi-faceted task: determine quality, sort out coverage, make recommendations with respect to reserves, check for potential subrogation and look at origin and cause.

Often one report is written to cover all of these points. But this can cause an issue during litigation, since parts of the report — such as coverage issues, for example — have nothing to do with litigation. This can make the document discoverable in court.

In order to avoid this, Lindsay recommends that adjusters write up two reports. One should deal with ordinary adjustment issues that are not in the least bit related to litigation, such as coverage. A separate report should be prepared to address liability and other potential litigation issues.

Handled in this manner, it can be put into an affidavit that the litigation was anticipated in preparation of the liability report, which deals strictly with a particular issue of liability, and which cannot be done if the report also contains references to coverage or quantum.